Top 3 Indicators for Trading Futures

Let’s assume you have a trade ladder and standard price chart and have the option of adding one indicator to your screen (I use the term indicator loosely as this can range from market breadth ratio, to a moving average, to a stochastic).

Hey Tim,
Ive read Steve Nison’s book on Candlestick charting and understand the advantages to that kind of analysis but what is the difference between a regular candlestick chart and a Heikin Ashi Candlestick Chart. I think I’ve heard you mention this in one of your videos.

The Heikin Ashi charting method takes the average of the open, high, low, and close of the prior candle. If you look at a Heikin Ashi compared to a regular candle chart the color of the bars indicating a trend change become much clearer. I like using Heikin Ashi on a 512 tick chart for the ES and a 233 tick chart for the 6E.

Hi William, there’s not a whole lot available on Heikin Ashi charts. Here is a video I did outlining how I use them http://eminimind.com/heikin-ashi-candlestick-charts/ In addition, I just wrote a piece for Active Trader Magazine on the topic of Heikin Ashi Candlestick Charts that is set to be published in the March edition of the magazine. I will post it on the blog once it’s published.

I really like using the Heikin Ashi study on the 512tick chart and then a regular candlestick study on the 15-min chart. When you pair that with the NYSE tick I’ve found my entry’s to be extremely precise.

Thanks for your response about ZB Rob. I also use the NYSE $TICK, but on a 1-min time frame, only concerned with the most recent print. I use it as a confirming signal for entry’s, getting long in low ticks, and short in high ticks. I don’t pay any attention to the candle formations on the ticks.

sorry rob 4 being late, try to use NYSE tick tgtr w keltner channels set to 7 on a 15min chart it works during sideways markets, if u have an email i can send u a chart of how i use nyse tick on a 1min chart

Take a close look at Heikin Ash in TOS and you will see that it *changes the shape of the candles*. To get the benefit of the trend-color while keeping the original candle shape/wick/shadow, I use the TTM_Trend with a solid fill on the down candles.

Tape Momentum is my favorite because when paired with volume, I find that it often precedes an intraday top or bottom.

I use 15 minute candlesticks with fibonaccis updated, and a market breadth indicator which takes the NYSE ups and NYSE downs and graphs them as a histogram. This creates a very reliable scalp signal in the ES. I also use range bar charts as secondary indicators. Be curious to compare the Heikin Ashis with range bars.

Great website. I, like yourself, have gone through a lot of indicators and trimmed many. Being a programmer and a Tradestation user, I’ve also programmed many. Most of them were not that useful.

It’s important for people to know that indicators don’t present any new information. They just present the information that is already in the price chart in a different manner. This is sometimes helpful, but it also can be just as misleading. All indicators bring certain aspects of price into focus, and in so doing distort other aspects. There’s really know way around that as far as I can tell.

I now use a lone 21-period moving average on the candlestick price chart itself. (This gives me a feel where price is in relation to the mean. It gives me something to relate price to.)

I also use a histogram under the price chart that is basically a double-MACD (8, 21, 55 ma) without the lines. It shows me the trend and the strength of the trend, but is mostly for confirmation because I’m really looking at…

Trendlines. Support and resistance are the foundation of all price movement, and resistance is either a horizontal line or a diagonal line (trendline). Breaks of trendlines are important events for me. I look closely at other support and resistance, including daily pivot levels for index futures.

Fibonacci for measuring pullbacks for entry. You helped encourage me to focus more on this rather than pullbacks to moving averages, which I was finding inconsistent, so thanks!

I use MACD mainly. I’ve noticed its very clear. Shows you trend, I also mainly use moving averages on the MACD. Seems to work just fine for me, I know there are a lot of people who don’t like it. Superdrive, and rsi. I also use moving averages. 4 wma , 9 sma, 22 ema, 50 ema and I’m testing now a 50 hma. What do you think?

Hey Josh, I don’t pay too much attention to open interest and time and sales anymore because so many orders are masked, or larger orders broken up into smaller ones. It’s become harder to decipher any tradeable information from the data.

Definitely would like to see some follow up posts on those who are still doing well with what they were using above. To this day I spend way too muc time looking for an edge to place a trade with. I know nothing works all the time but would be good to have more consistency. Thanks

Thanks for the reply Tim. I found some of the posts here very interesting based on some of the indicator choices others made.
I still have a TOS chart setup similar to your. The tick chart alarms you created are still excellent to this day.
Hope all is warm there in AZ. It was minus 5 here yesterday morning in Sun Valley ID.
May be my last winter here. TX is calling me!

Mark or Tim Racette,
Typos in my previous post, sorry!
I meant, besides your tick chart alert, what other things or indicators u are using along with this chart to make a living from trading the ES? I would like to open à futures trading acct wiith ninjatrader and would like apply your tools there. Low commissions cost at Ninja. I have my roth Ira with TOS, but blow it last year by trading options.
Thx

Hey Pete, keep things simple. That’s the key. I use the market internals (breadth, ad line and NYSE tick) to trade the ES along with my 512 tick chart. I also look at a daily chart and 5-min chart throughout the day. Other than that it’s just price action. Identifying the swing low and swing high breaks and years of trading the markets.